February 2018

Wednesday February 28th 2018

A new lawsuit has been filed. Owl Creek v. U.S., click here to view.
Peter Chapman writes, “Owl Creek filed a lawsuit against the government in the U.S. Court of Federal Claims late last week. Owl Creek is represented by a team of corporate restructuring lawyers led by Bruce Bennett at Jones Day. Owl Creek owned approximately $2 billion of junior preferred stock in the GSEs acquired post-conservatorship and prior to imposition of the Net Worth Sweep. Count III of the complaint, at pp. 43-44, says HERA’s succession clause imposed duties on the government to honor the GSEs’ contracts and look out for non-controlling shareholders’ interests, and the government breached those duties. Count IV of the Complaint, at pp. 44-47, says the government breached its implied-in-fact contract with Owl Creek and other junior preferred shareholders.”

Peter Chapman further writes, “Owl Creeks’ team of lawyers at Jones Day has requested access to non-public discovery materials, and an updated chart showing who has access to those materials is (linked here).”

New filing in the Jacobs and Hindes case, click here to view.
Peter Chapman writes, “Messrs. Jacobs and Hindes filed their opening brief in the Third Circuit today. “The Net Worth Sweep is an absurdity under state corporate law, as it gives Treasury a perpetual quarterly ‘dividend’ equal to the entire positive net worth of Fannie and Freddie,” Messrs. Jacobs and Hindes tell the Third Circuit. “Preferred stock of a Delaware or Virginia corporation cannot be given a cumulative dividend right committing the corporation to pay all profits every quarter, no matter how great, to the holder for all time to the absolute, permanent exclusion of dividends to all other stockholders,” they explain. Accordingly, they argue, Judge Sleet goofed when he concluded HERA insulates FHFA’s illegal actions from judicial review. Messrs. Jacobs and Hindes want the Third Circuit to vacate Judge Sleet’s flawed ruling.”

SFIG Agenda – imn.org
Click the ‘Tuesday, February 27th 2018’ tab and scroll down to ‘State of GSE Reform: Discussion of Current Reform Models in Play and Their Relative Merits’ at 1:30 pm. Landon Parsons of Moelis & Company is listed as a speaker.

New filing in the Roberts case, click here to view.
Peter Chapman writes, “FHFA sent the Seventh Circuit a letter yesterday advising that the U.S. Supreme Court declined to review the Perry decision from the D.C. Circuit.”

New filings in the Fisher case.13-608-003413-608-0035
Peter Chapman writes, “The Fisher Plaintiffs sought and obtained a two-week extension of the deadline to file their amended complaint and for the government to file its motion to dismiss.”

New filings in the Reid case.14-152-002014-152-0021
Peter Chapman writes, “The Reid Plaintiffs sought and obtained a two-week extension of the deadline to file their amended complaint and for the government to file its motion to dismiss.”

New filing in the Fairholme case, click here to view.
Peter Chapman writes, “Judge Sweeney’s order granting the two-week extension is (linked above).”

New filing in the Cacciapalle case, click here to view.
Peter Chapman writes, “Judge Sweeney’s order granting the two-week extension is (linked above).”

New filing in the Rafter case, click here to view.
Peter Chapman writes, “Judge Sweeney’s order granting the two-week extension is (linked above).”

New filing in the Arrowood case, click here to view.
Peter Chapman writes, “Judge Sweeney’s order granting the two-week extension is (linked above).”

New filing in the Sammons case (W.D. of Texas), click here to view.
Peter Chapman writes, “The Solicitor General filed its brief yesterday urging the High Court to decline Mr. Sammon’s invitation to explore the validity of the Tucker Act, the United States’ sovereign immunity, the Constitution’s Just Compensation Clause, or any other topic he raises in his petition for review.”

New filing in the Washington Federal case, click here to view.
Peter Chapman writes, “Washington Federal has asked Judge Sweeney to extend the deadline for it to file an amended complaint by two weeks to Mar. 8, and that the government’s deadline to file a renewed motion to dismiss be extended to June 29.”

New filing in the Fairholme case, click here to view.
Peter Chapman writes, “To keep the briefing schedule in all of the cases pending before Judge Sweeney, Fairholme is asking her to extend the deadline for it to file an amended complaint by two weeks to Mar. 8, and that the government’s deadline to file a renewed motion to dismiss be extended to June 29.”

New filing in the Fairholme case, click here to view.
Peter Chapman writes, “Fairholme and Arrowood delivered their response to FHFA, Fannie and Freddie’s motion to dismiss (Doc. 66filed on Jan. 10, 2018, in Case No. 13-mc-01288) to Judge Lamberth yesterday evening. Fairholme and Arrowood tell Judge Lamberth that while FHFA argues shareholders’ contract claims aren’t ripe, they are because the D.C. Circuit said they are in the Perry decision. Further, while HERA and the PSPAs presumably could have eliminated public shareholders’ interests in the GSEs, Congress and the PSPAs didn’t do that. As a result, shareholders are entitled to damages and restitution.”

New filing in the Fairholme case, click here to view.
Peter Chapman writes, “Counsel to the Rafter Plaintiffs sent Judge Sweeney a letter yesterday disclosing an inadvertent breach of the Protective Order entered in Fairholme v. U.S. Apparently, one sentence from one still-sealed document FHFA produced was included in a draft of the Rafter Plaintiffs’ amended complaint to be filed later this month, and that draft containing that secret sentence found its way to David Klafter at Pershing Square. Pershing Square has done everything it knows to do to contain the leak.”

New filing in the Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigations case, click here to view.
Peter Chapman writes, ‘The Class Plaintiffs delivered their response to FHFA’s motion to dismiss to Judge Lamberth yesterday evening. “Some might think that private shareholders had no right to receive anything even before the Third Amendment was agreed to on August 17, 2012 — or that they did not ‘deserve’ to receive anything given that they were owners in distressed entities that Treasury ‘bailed out’ through its funding commitments,” the Class Plaintiffs tell Judge Lamberth, “[b]ut that is neither legally correct nor fair.” The Class Plaintiffs urge Judge Lamberth “to recognize the basic fairness underlying Plaintiffs’ claims not because the law is against us, but because the law is overwhelmingly with us. The only thing that could be against us is an instinct to favor the Government based on the perception that it stepped into the breach during a crisis. But even if that perception were fully accurate, it is not the whole story, and it cannot justify what happened in August 2012.”‘

New filings in the Rop case.17-cv-00497-004117-cv-00497-004217-cv-00497-0043
Peter Chapman writes, “Treasury shared a copy of the Delaware Supreme Court’s recent decision in California v. Alvarez earlier this month to Judge Maloney. Yesterday, the Rop Plaintiffs responded to FHFA and Treasury’s submissions of the California and PHH decisions. The Rop Plaintiffs tell Judge Maloney that its claims can’t be derivative if HERA’s succession provision is valid, and he should follow Judges Henderson and Kavanaugh’s dissenting opinions saying CFPB (like FHFA) is unconstitutionally structured.”

New filing in the Voacolo case, click here to view.
Peter Chapman writes, “Mr. Voacolo’s lawyers mailed a copy of their client’s complaint to the U.S. Attorney in Newark, N.J., today, and a copy of the court filing memorializing that event is (linked above).”

New filing in the Collins case, click here to view.
Peter Chapman writes, “The Collins Plaintiffs responded yesterday to Treasury’s letter directing the Fifth Circuit’s attention to the Delaware Supreme Court’s decision in California v. Alvarez. The Collins Plaintiffs tell the Fifth Circuit that their claims have to be direct rather than derivative — especially if HERA says shareholders can’t stand in the GSEs’ shoes, as FHFA and Treasury repeatedly argue.”

New filing in the Arrowood case, click here to view.
Peter Chapman writes, “Arrowood’s first amended complaint was filed on Feb. 1 and docketed this morning.”

New filings in the Collins case.17-20364-0051433419317-20364-00514337464
Peter Chapman writes, “FHFA provided the Fifth Circuit with a copy of the D.C. Circuit’s decision in PHH v. CFBP late last week and the Collins Plaintiffs filed a response today. FHFA tells the appellate court that the PHH decision closely tracks the ruling from district court now under review. The Collins Plaintiffs urge the Fifth Circuit panel to carefully review and follow Judge Henderson and Kavanaugh’s dissenting opinions in PHH because any government agency with no accountability to the President, Congress or the Courts can’t be the right result.”

New filing in the Robinson case (U.S. Supreme Court), click here to view.
Peter Chapman writes, “Ms. Robinson is asking the U.S. Supreme Court to extend her time to file a petition seeking review of the Sixth Circuit’s decision to Mar. 22, 2018.”

New filing in the Collins case, click here to view.
Peter Chapman writes, “The Department of Justice provided the Fifth Circuit with a copy of a decision from the Delaware Supreme Court last week saying that issue preclusion bars shareholders pursuing derivative claims from relitigating issues that were decided against other shareholders in an earlier derivative suit. The decision, the government says, provides further support to Treasury’s argument that issue preclusion bars the Collins Plaintiffs from relitigating issues that were decided against GSE shareholders by Judge Lamberth and upheld by D.C. Circuit.”

New filing in the Bhatti case, click here to view.
Peter Chapman writes, “FHFA delivered a copy of yesterday’s 6-3 decision from the D.C. Circuit in PHH v. CFPB finding no constitutional defect in the way Congress structured that bureau.”